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Uganda: Who is to Blame for the Acute Fuel Crisis?

Wafula Oguttu and Ofwono Opondo

3 January 2009

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Kampala — WHAT are the views of the Government and the opposition on the topic of the week? Sunday Vision pits opposition columnist Wafula Oguttu against the Government representative, Ofwono Opondo.

Wafula Oguttu

THE Government can't control fuel and food prices, but we must act in an orderly way so as not to cause confusion."

Those were the words of President Yoweri Museveni in his 2009 New Year message made at a time when the desperate Ugandans had ignorantly placed their last hopes in what he was going to say about the fuel crisis that has hit them real hard throughout 2008.

I personally had not expected the President to say or do anything about the fuel crisis in people's interests. Perhaps those Ugandans who hitherto did not know whose interests the Government is serving will this time wake up.

For the past 10 years or so, the NRM government has increasingly tended to serve foreign interests, plus those of a small agent class of people with high political connections and relegated the majority's welfare to the dogs.

Food and fuel are key items in people's lives and the stability and development of the national economy. Any crisis involving these two essential commodities will negatively impact on the stability of the country.

All governments in the world, except the NRM, will always plan and ensure that they keep sufficient national stocks of food and fuel to be used in case of shortages to moderate prices, among other remedies.

The high fuel prices and shortages Ugandans suffered in 2008 were largely a result of the Government colluding or turning a blind eye to the sinister cartel schemes by oil marketers and speculators. The Government has its eyes on the high fuel tax revenue crucial for the budget.

A significant reduction in local fuel prices following the big fall in world crude oil prices from $147 for a barrel (160 litres) to $40 now, would certainly deform the 2008/9 national budget that is largely dependent on revenue from that single commodity.

A serious government should have a clear policy and an automated formula that links the world oil prices to the local fuel prices, instead of leaving citizens to the so-called market forces ever manipulated by economic vampires.

Sadly for this country, many of the oil marketers and speculators are also senior leaders in the NRM. They work for multinational companies both in the country as oil dealers and in the Government as paid agents.

They are either hoarding fuel or taking fewer deliveries from Mombasa to cause artificial shortages. Ironically, these quislings are the same people who also benefit from the fuel that the Cabinet has been directing oil companies to hold as emergency stocks for the army and government ministries.

To justify their daylight robbery which many Ugandans seem to meekly accept without raising their voices, the quislings have used the incompetent ministers of energy to give lame excuses every time starting with the Kenya election crisis, the world oil prices, the Somali pirates, the Kenya Pipeline Authority problems and now the so-called three-axle trucks. Yes, Ugandans are aware of these challenges, but how has the Government prepared for them? Where are the national food and oil reserves to ameliorate emergencies? Government is largely responsible for the fuel crisis and the confusion.

Ofwono Opondo

UGANDA is experiencing a serious fuel crunch, which is being blamed on the ineptitude of the Government's transport, energy, trade and taxation policies. The officials have been inept in executing and monitoring policies and even giving credible explanations which have over the years resulted into cumulative malaise.

The failures have lent simplistic critics ammunition to attack the Government. These critics mainly cite high taxes, price and inadequate storage at the Jinja reservoir tanks as the reasons for the shortages. We cannot successfully solve the above issues without adequate and effective planning.

The construction of Uganda's pipeline from Eldoret to Kampala and expanding storage facilities should be expedited. Firstly, there has been lack of advance and strategic planning on the transport and energy sector to efficiently obtain and deliver fuel into the Ugandan market, particularly during the last two decades when our economy has been growing at an average of 9%.

The high economic growth and activities in Uganda and the region are major factors leading to the high energy demand, hence the crisis. Rwanda, western DR Congo and South Sudan depend on Uganda's supply routes. It is a positive challenge we must solve.

For a long time, the main Kenyan port at Mombasa has not been expanded or upgraded to accommodate and efficiently manage modern delivery systems for vessels from high seas and has resulted in congestion and frequent breakdown.

Similarly, because of old political and economic prejudices, Ugandan officials have been reluctant to exploit the Tanzanian ports and routes, leaving us at the mercy of Kenya.

The refinery and pipelines are also old, dilapidated and lack the capacity to serve the expanded economies of this region. Solutions must be found in efficient refinery and delivery at Mombasa and supply and transport systems.

The near total collapse of the railway system and recent banning of four axle-loads in favour of three-axle trucks simply added to an already worse situation as transporters and petroleum companies need adequate time to plan on changing their trucks.

Every four-axle truck delivers 42,000 litres compared to 30,000 delivered by a three-axle truck. The perennial drought in Kenya, Tanzania and Uganda means that the region can no longer rely on hydropower and many vital sectors like telecommunications, mining and hotels have switched to using diesel.

Uganda uses two million litres of diesel daily, 500,000 of which generate thermal power. Most gold mines in northern Tanzania have resorted to diesel. Uganda also seems to have very many 'clever' people around, but they don't know the priorities, although they have positions of power.

They use every opportunity to subvert good policies for personal benefits. There is too much obstruction during decision-making processes and corruption as in Bujagali Dam, rural electrification and the attempted privatisation of the Jinja reservoir tanks.

In addition to the above factors, the old corrupt and speculative Kenyan and Ugandan political, bureaucratic and economic elite have ensured that each festive season is a time for them to cause artificial scarcity as a means of feathering their own nests.

This group has survived and flourished in this way since the 1970s and may not end easily. They sometimes create and unnecessarily harden transport, energy and trade rules knowing well that Uganda may not adapt quickly.

Until last October Kenya did not permit Uganda to collect fuel directly from Mombassa or Nairobi for 'fear of dumping', and Ugandan companies had to wait at the dilapidated Eldoret facility. Most petroleum transport businesses are owned and controlled by Kenyan elites.

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